Morality in Economics?

A read asked why I do not address any morality in discussing economic issues and the answer is simple, from a purely competitive standpoint there is no efficiency other than what clears the market. In other words, matching a buyer with a seller is the only right thing in the world and preventing equilibrium is the only wrong thing.

This is the view of the Austrian school and the Milton Friedman cult of personality. It believes that markets never fail and government stops free enterprise. They believe that everything is a matter of allowing the market to work and if you are not successful it is because you are lazy since everyone has the ability to trade their goods and services freely with anyone else in a free market. With their belief that the absence of government promotes freedom and prosperity, shouldn't they point to Somalia as the perfection of their ideology? It has had no government for nearly two decades and no barriers to entering the market. It should be a paradise!

This view is intellectually and morally shallow because it does not deal with the impact of externalities since the market will "take care of it." As anyone who has not had their head in the sand the past two years can attest, businesses do not self regulate. Companies in bankruptcy are flying executives to resorts while laying off workers and the balance sheet crumbles. Also, pollution is another area that market does not fix because the cost of pollution is borne by third parties more than by the producer. Without the right to not be sickened by pollution, individuals have no power to stop it. This is the purpose of government, to deal with the externalities that the market cannot address because the efficient level is not the societally efficient level.